Marc Killian  00:20

Hey everybody, welcome into the podcast. Thanks for hanging out with Jude and I as we talk investing, finance and retirement and Jude better questions could build better retirements, if you kind of think about that. That’s kind of a cool way of thinking about how to think about your questions a little bit in a more well rounded way, maybe. So that’s that’s our topic this week. How you doing? My friend?

Jude Wilson  00:39

I’m doing excellent, and I’m ready for this episode because these questions I get very often at the firm. I think other people may have these questions, but, you know, they when you’re in class, you want to ask a question, but you’re waiting on somebody to ask the same question, so no pressure. Will answer the questions today.

Marc Killian  00:59

Exactly, right? And people, they often feel like, you know, I want to say this, but I’m not exactly sure you know. So you know, it’s we’ll ask it for you, and we’ll just kind of maybe think about reframing it a little bit, because they are pretty standard questions when it comes to finance and retirement. But maybe kind of twisting our thoughts a little bit can help us, you know, kind of come at it from a different angle, right? So we’ll talk about a couple of these. So let’s just dive in and see what we got here on the list. We got a whole bunch of them, but we’re going to tackle a couple of them here. So let’s dive in. How much money do I need to have saved in order to retire? That’s like, always a huge ones, like, how much do I need, right? So what’s a better way to think about this?

Jude Wilson  01:37

So there’s an easy way to get in the ballpark, and then there’s a more specific way to get to narrow that number down. So let’s talk about the more specific way. The most specific way is to see a professional that is experienced in retirement planning, because they’re going to look at your current cost that it takes for you to live the lifestyle that you become accustomed to. They’re going to to inflate that number for inflation and try to predict what it may cost you in the future. They’re going to consider taxes. They’re going to do a well rounded financial plan to get you in that ballpark and then figure out what you have to do from now until the time that you do retire to get into that range of money. But for those of you who just want to have a number in your head, we call it the financial freedom number here at the firm, I like that if you just want to have that quick number, the easiest way is to figure out, you know, how much income do you believe you need to live your lifestyle today and use what’s called the safe distribution rule. So you take your income divided by a safe percentage that you can that you believe that you can get a return off of your money, let’s say 4% and divide that 4% into the income that you believe that you need, and it will give you a round estimate. And sometimes people get really scared when they see that number, because it’s usually a big number, but again, that’s just an estimate. It’s not taking into account, you know, the money that you may have already saved up, the fact that your mortgage may be paid off, or the kids may be out of the house. But if you want a quick number, that’s the way

Marc Killian  03:33

to go. All right, that’s a great way to reframe that question. Should I get long term care insurance or just roll the dice? That’s another one where people just feel like it’s so expensive. I you know, what is going to take our chances?

Jude Wilson  03:45

Yeah, this is a, this is a tough question that I that I get so often, because so many of us have dealt with and and a parent or loved one that is having challenges as they age, dementia, Alzheimer’s, all of these things, and generally, the cost of care for assisted living and assistance is growing at twice the rate of inflation. So people are asking me, Jude, is it worth it to buy long term care. And the answer isn’t as direct as I would like it, the it really surrounds around the assets that you have right now. So should you self insure? Meaning, hey, do I have enough when I retire to live the lifestyle that I’ve become accustomed to and more that I can kind of earmark toward long term care costs, when and if that happens, if so, you probably don’t need long term care insurance. Don’t know a lot of people in that, in that, in that boat, but people between the ages of 55 and, let’s say about 65 long term care insurance. It’s. Itself is reasonably priced, and that’s all relative, obviously, to your budget. But after the age of 65 it tends to start to grow dramatically. And so if you’re a person that really wants to figure out, you know, is long term care a part of a plan that I should have, I implore you to talk to a financial advisor, do a well rounded plan, because most of the clients that we bring into the office, we see that they’ve been working with another financial advisor, and they figured out what they needed to retire, but they didn’t look at long term care. They didn’t look at taxes, so many of the other areas of a holistic plan, and this one, this area specifically, is one that needs to be included in a well rounded financial plan.

Marc Killian  05:52

Yeah, so ask yourself, you know, just what are all my options versus just saying, well, it’s too expensive and I’m just going to roll the dice right, at least say what are the options that I have available to me, right? And some of those that you just highlighted, is a great place to start. And of course, working with an advisor is going to help you kind of and hopefully, hone in on some of the things that are possibly out there for you, but just putting your head in the sand Never a good way to go on that one. All right. Jude, should I take Social Security? Obviously, like, this is always like, a huge question. Do I do it at 62 do I do it at 67 or do it? I do it at 70 right? So how? What’s a better way to think about the social security question?

Jude Wilson  06:33

Oh, my God, this is the question I get with every new client. When should I take Social Security? We have some people that believe, hey, I need to take it now, because I hear Social Security is running out and I’ve paid into the system, but I want to get my money before it goes bankrupt. Other people who say, You know what, Jude, I know that after my full retirement age, I get an automatic 8% increase up to 870 so I’m going to wait until 870 I see both ends of the spectrum when people come into the office. And the answer really is, again, this is one that really needs to be calculated by someone who understands Social Security, because there’s over 400 different combinations of claims between spouses that could effectively increase the amount of Social Security you receive over your lifetime by hundreds of 1000s of dollars. So you want to think about your longevity. How long did your parents live? How healthy are you? You want to think about the age difference between yourself and your spouse. You want to think about who may have earned the most in their working years, and all of these factors combined into calculating, really, when is the optimal time to take Social Security? But at the end of the day, if, if you’re nearing retirement and you you just need income, you may not have a choice. You might just have to take it at 62 Yeah.

Marc Killian  08:01

So, you know, thinking about it as part of your overall or included in your strategy is the point, right? So thinking about that question and saying, Well, when’s the best time to take it? No, when’s the best time to take it based on all of my other factors, all of my retirement strategy, not just the, you know, the best time to take it for one example or another, put it together with a cohesive strategy, especially if you are married as well, and that way you have, you know, you’re maximizing, you know, the money, because it could be big money. Jude, it could be big Yeah.

Jude Wilson  08:32

Oh, yeah. So several times, yeah, we have prospective clients that come in and they say, Jude, I wish I would have saved more, but when they but what they’re not calculating is either the value of their pension, if they have a pension, and the value of Social Security. The value of social security over your lifetime, very well may be well over a million dollars. And so it is such an important part of a holistic strategy, it needs more thought than just, Hey, should I take it early, or should I take

Marc Killian  09:05

it late? All right? Jude, I’m gonna do this last one. It’s kind of a combo question, right? Okay, it’s either kind of like, should I move to cash, or do I keep taking risk? And it’s a, it’s a tough one, because we’ll just look at the calendar year. We’re in 2025 right this minute. While we’re talking year to date, this just this calendar year to date, the s, p is up 16 and a half percent. That’s a pretty good year, right? Earlier in the year was all this worry and fear, and I’m going to move to cash, because we’re going to have all these problems. Now here we are later in the year, and it’s like, well, now the numbers are really high. Am I taking too much risk, right? So people, we’re always jumping back and forth from one foot to the next when it comes to dealing with the market. So if you’re worried about, how can I deal with risk? Maybe, what’s a better way to think about, you know, how do I avoid risk? Like, what’s a better way to kind of tackle that conversation?

Jude Wilson  09:56

Well, you know, this is one that I love, because. We have a strategy that is the foundation of our financial plan, called the bucket plan. And it’s our belief that every dollar that you have should be divided with within three different buckets, not necessarily physically, but understanding the purpose of those.

Marc Killian  10:19

I kind of like the three buckets. Man, yeah, we can

Jude Wilson  10:22

walk around with buckets in our hands, that’s right. So each bucket has a timeframe associated with it and a level of a level of risk or volatility and a purpose for that bucket. For instance, your nav bucket is your safe and secure money. We call it your sleep at night, money. If something happened and I needed to make a transaction right now, I could make that transaction. It’s also planned expenses that you may be expecting in the near future, and in the soon bucket, we call that, usually our income bucket. If you are near retirement or in retirement, these are generally investments that can pay income to help subsidize your retirement, and in your later bucket, we call that our growth bucket. That’s the money that we will typically see the volatility that we’ve seen in the market. It’s going to go up and down. But when you’re strategized against three, three different buckets. That way you don’t have to panic like some people did earlier in the year, when we had heard the announcements of tariffs, and the market dramatically went down within one week. Well, if you pulled your money out at that point, you you lost the opportunity for the great run up we’ve seen. But if you’re strategized among three buckets, you know exactly how much money is in your now bucket, and gives you the opportunity to let your money grow regardless of what’s going on in the everyday news cycle.

Marc Killian  11:53

Yeah, yeah. And at the end of the day, right? Jude, I mean, like the cookie cutter plans, they just don’t take into account the how,

Marc Killian  12:02

how volatile so many things are in the world nowadays, plus just general personal finance. Is a lot more going on now than there used to be, right? So just, you know, having that cookie cutter plan is this doesn’t seem like it holds water to me as much as maybe it, maybe it did for a while a few years ago, maybe it never did. I don’t know, right? But at the end of the day, you need you need individual advice. You need specific advice. To reframe these questions based on what you need,

Jude Wilson  12:28

100% i i Sometimes chuckle, because the most common portfolio is 6040, 60% equities, 40% fixed income. And when new clients come into the office, nine times out of 10, no one has talked to them about buckets, and they’re in just your traditional 6040, portfolio. And so they get such a sense of relief when we can show them there’s potentially a better way of strategizing these dollars.

Marc Killian  13:00

I mean, it’s, it’s been tried and true, and it does work, but there could be a better way to do things. That’s also been the norm for like, 60 years too. So yeah, you know, just looking at specifics. I mean, maybe you maybe 6040 isn’t the right split for you, right? So lots of different things to look at in there. So as always, if you got questions need help, reach out to Jude and his team. We’ll have links in the description of the show notes below, you can go to the tax bomb.com and check out the calculator there, and some of the different things we’ve got on the website. Of course, you can also go to his main website, which is send trust fs.com and again, we’ll have all the links below, so you don’t have to worry about thinking about that, just click on one of the links and get started today. Don’t forget to subscribe to us on Apple Spotify and right here on YouTube. That way you catch new episodes when they come out. And Jude, I think this is our Thanksgiving one. So Happy Thanksgiving to you and all of our folks out there.

Jude Wilson  13:47

Hey, Brother, I am so thankful to all of the listeners that we have, clients, friends and family. I’m thankful to you. We’ve been doing this for a few years now, and we’ve grown a great friendship, so it is the appropriate time to give thanks.

Marc Killian  14:02

Well said, we’ll see you next time, right here on the Roth guy with the one and only. Jude Wilson, have a happy holiday, folks.

Announcer  14:12

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